While Elon Musk and Twitter have reached an agreement to sell the platform to Musk, the terms of this agreement also included the penalty that would be imposed if the agreement was cancelled. Accordingly, the party canceling the agreement will be obliged to pay a substantial amount of compensation to the other party.
On Monday, April 25, the whole world got the news of the expected purchase. Elon Musk, CEO of Tesla and SpaceX companies and the richest person in the world, tweeted for approximately $44 billion had agreed to purchase. As part of the deal, Musk valued each Twitter share at $54.20, which is currently $49.68.
Well, while Elon Musk’s purchase of Twitter continues to divide people, what will happen to Musk and Twitter if this purchase is canceled for any reason? In case of cancellation of this purchase agreement, which caused dynamism in the market What punishment will both parties receive?disclosed in the U.S. Securities and Exchange Commission (SEC) document.
If the deal is canceled, $1 billion will be paid to the other party.
The document, shared on the same day as Elon Musk’s purchase news, revealed that if Twitter or Elon Musk cancel the agreement, they will be fined. According to the document, if either party decides to cancel the agreement, will be obliged to pay 1 billion dollars to the other party.
However, the document Until 24 October 2022 It also reveals that the agreement may be terminated if it is not fulfilled. However, it is also stated that the period may be extended by 6 months in order to meet the requirements of the antitrust law. The same document states that Twitter may also receive different purchase offers until the purchase is complete, but if an agreement is reached, the new buyer can terminate the agreement with Elon Musk. Must meet the $1 billion payable to Musk is reported.
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